Interflour looks to cash in on Vietnamese beer drinkers

Interflour, one of the largest flour millers in Asia, has started building its first malting plant in Vietnam to capitalise on the burgeoning middle class and its appetite for beer, the Weekly Times reported on Monday.

Interflour, which is jointly owned by Australia’s biggest wheat exporter and co-operative CBH Group and Indonesian company Salim Group, has nine processing facilities in five countries, including Indonesia, Malaysia, Vietnam and Turkey, processing approximately 1.5 million tons of flour a year, according to the company.

Vietnam’s demographics and preference for beer is driving Interflour’s malting plans. Beer is overwhelmingly the country's drink of choice. About 97 percent of all alcohol drunk by Vietnam’s population of 94 million is beer. With beer consumption more than doubling in the past decade, almost one million people reaching the legal drinking age of 18 each year, and incomes on the rise, it is clear why the company has made the move.

“Vietnamese love beer and its demand is increasing rapidly, Heineken [which brews locally] can’t keep up with its supply of beer and production,” said Interflour Group Project Director Joe Pampano.

Interflour’s Cai Mep flour mill and grain storage facility also has a port, which is where the malting plant is being built. Photo by Interflour.

The company currently has two Vietnamese sites; the recently purchased mill in the port city of Da Nang, and at Cai Mep, about 80 kilometers south of Ho Chi Minh City.

The Cai Mep flour mill and grain storage facility also has a port, which is where the malting plant is being built.

“The port gives us an advantage because we can buy the barley in bulk, but we also shift grain in containers and bags,” said Pampano.

He says barley will not be sourced solely from CBH Group or Australian growers, but from other countries when prices are competitive.

The malting plant will be the first in Southeast Asia, as it is difficult to malt in the tropics. Malting generally needs low temperatures and dry conditions to assist the process. But with modern technology and an expert team, Pampano is confident Interflour will be able to successfully manufacture malt and compete in the growing market.

Interflour hopes to start the malting operations next March, and plans to supply 40 percent of the 460,000 tons of malt currently imported each year.

“Margins on malt will far exceed the margins that we get on flour at the moment,” Pampano says.

“Once we are established it will make it harder for our competitors," the Interflour executive was confident.